Access to Capital in Rural Thailand: An Estimated Model of Formal vs. Informal Credit

The aim of this paper is to understand the mechanism underlying access to credit. The author focuses on two important aspects of rural credit markets in Thailand. First, moneylenders and other informal lenders coexist with formal lending institutions such as government or commercial banks, and more...

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Main Author:	Gine, Xavier
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2012
Subjects:	ACCOUNTING AGRICULTURAL BANKS AGRICULTURE BORROWING CAPITAL REQUIREMENT CAPITAL REQUIREMENTS COLLATERAL COMMERCIAL BANKS COST OF CAPITAL CREDIT INSTITUTIONS CREDIT MARKETS DEBT DEMOGRAPHICS DEPOSITS EMPIRICAL RESEARCH EMPIRICAL STUDIES FARMS FINANCIAL DATA FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FIXED ASSETS FIXED CAPITAL FIXED COSTS INCOME INFLATION INFLATION RATE INFORMATION ASYMMETRIES INSURANCE INSURANCE COMPANIES INTEREST PAYMENT INTEREST RATE INTEREST RATES LENDING INSTITUTIONS LIVING STANDARDS LOAN SIZE MARGINS MATCHING MATURITIES MATURITY MAXIMUM LIKELIHOOD ESTIMATION MONOPOLY RENTS OPPORTUNITY COST OPPORTUNITY COSTS PRODUCTIVE ASSETS PROFIT MARGINS PROFITABILITY PROXY RURAL COMMUNITIES SAVINGS SAVINGS DEPOSITS THAILAND TRADERS TRANSACTION COSTS WEALTH WORKING CAPITAL
Online Access:	http://documents.worldbank.org/curated/en/2005/02/5610659/access-capital-rural-thailand-estimated-model-formal-versus-informal-credit http://hdl.handle.net/10986/8918

id	okr-10986-8918
recordtype	oai_dc
spelling	okr-10986-89182021-04-23T14:02:42Z Access to Capital in Rural Thailand: An Estimated Model of Formal vs. Informal Credit Gine, Xavier ACCOUNTING AGRICULTURAL BANKS AGRICULTURE BORROWING CAPITAL REQUIREMENT CAPITAL REQUIREMENTS COLLATERAL COMMERCIAL BANKS COST OF CAPITAL CREDIT INSTITUTIONS CREDIT MARKETS DEBT DEMOGRAPHICS DEPOSITS EMPIRICAL RESEARCH EMPIRICAL STUDIES FARMS FINANCIAL DATA FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FIXED ASSETS FIXED CAPITAL FIXED COSTS INCOME INFLATION INFLATION RATE INFORMATION ASYMMETRIES INSURANCE INSURANCE COMPANIES INTEREST PAYMENT INTEREST RATE INTEREST RATES LENDING INSTITUTIONS LIVING STANDARDS LOAN SIZE MARGINS MATCHING MATURITIES MATURITY MAXIMUM LIKELIHOOD ESTIMATION MONOPOLY RENTS OPPORTUNITY COST OPPORTUNITY COSTS PRODUCTIVE ASSETS PROFIT MARGINS PROFITABILITY PROXY RURAL COMMUNITIES SAVINGS SAVINGS DEPOSITS THAILAND TRADERS TRANSACTION COSTS WEALTH WORKING CAPITAL The aim of this paper is to understand the mechanism underlying access to credit. The author focuses on two important aspects of rural credit markets in Thailand. First, moneylenders and other informal lenders coexist with formal lending institutions such as government or commercial banks, and more recently, micro-lending institutions. Second, potential borrowers presumably face sizable transaction costs obtaining external credit. The author develops and estimates a model based on limited enforcement and transaction costs that provides a unified view of those facts. The results show that the limited ability of banks to enforce contracts, more than transaction costs, is crucial in understanding the observed diversity of lenders. 2012-06-25T14:56:59Z 2012-06-25T14:56:59Z 2005-02 http://documents.worldbank.org/curated/en/2005/02/5610659/access-capital-rural-thailand-estimated-model-formal-versus-informal-credit http://hdl.handle.net/10986/8918 English en_US Policy Research Working Paper; No. 3502 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research East Asia and Pacific Asia Thailand
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ACCOUNTING AGRICULTURAL BANKS AGRICULTURE BORROWING CAPITAL REQUIREMENT CAPITAL REQUIREMENTS COLLATERAL COMMERCIAL BANKS COST OF CAPITAL CREDIT INSTITUTIONS CREDIT MARKETS DEBT DEMOGRAPHICS DEPOSITS EMPIRICAL RESEARCH EMPIRICAL STUDIES FARMS FINANCIAL DATA FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FIXED ASSETS FIXED CAPITAL FIXED COSTS INCOME INFLATION INFLATION RATE INFORMATION ASYMMETRIES INSURANCE INSURANCE COMPANIES INTEREST PAYMENT INTEREST RATE INTEREST RATES LENDING INSTITUTIONS LIVING STANDARDS LOAN SIZE MARGINS MATCHING MATURITIES MATURITY MAXIMUM LIKELIHOOD ESTIMATION MONOPOLY RENTS OPPORTUNITY COST OPPORTUNITY COSTS PRODUCTIVE ASSETS PROFIT MARGINS PROFITABILITY PROXY RURAL COMMUNITIES SAVINGS SAVINGS DEPOSITS THAILAND TRADERS TRANSACTION COSTS WEALTH WORKING CAPITAL
spellingShingle	ACCOUNTING AGRICULTURAL BANKS AGRICULTURE BORROWING CAPITAL REQUIREMENT CAPITAL REQUIREMENTS COLLATERAL COMMERCIAL BANKS COST OF CAPITAL CREDIT INSTITUTIONS CREDIT MARKETS DEBT DEMOGRAPHICS DEPOSITS EMPIRICAL RESEARCH EMPIRICAL STUDIES FARMS FINANCIAL DATA FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FIXED ASSETS FIXED CAPITAL FIXED COSTS INCOME INFLATION INFLATION RATE INFORMATION ASYMMETRIES INSURANCE INSURANCE COMPANIES INTEREST PAYMENT INTEREST RATE INTEREST RATES LENDING INSTITUTIONS LIVING STANDARDS LOAN SIZE MARGINS MATCHING MATURITIES MATURITY MAXIMUM LIKELIHOOD ESTIMATION MONOPOLY RENTS OPPORTUNITY COST OPPORTUNITY COSTS PRODUCTIVE ASSETS PROFIT MARGINS PROFITABILITY PROXY RURAL COMMUNITIES SAVINGS SAVINGS DEPOSITS THAILAND TRADERS TRANSACTION COSTS WEALTH WORKING CAPITAL Gine, Xavier Access to Capital in Rural Thailand: An Estimated Model of Formal vs. Informal Credit
geographic_facet	East Asia and Pacific Asia Thailand
relation	Policy Research Working Paper; No. 3502
description	The aim of this paper is to understand the mechanism underlying access to credit. The author focuses on two important aspects of rural credit markets in Thailand. First, moneylenders and other informal lenders coexist with formal lending institutions such as government or commercial banks, and more recently, micro-lending institutions. Second, potential borrowers presumably face sizable transaction costs obtaining external credit. The author develops and estimates a model based on limited enforcement and transaction costs that provides a unified view of those facts. The results show that the limited ability of banks to enforce contracts, more than transaction costs, is crucial in understanding the observed diversity of lenders.
format	Publications & Research :: Policy Research Working Paper
author	Gine, Xavier
author_facet	Gine, Xavier
author_sort	Gine, Xavier
title	Access to Capital in Rural Thailand: An Estimated Model of Formal vs. Informal Credit
title_short	Access to Capital in Rural Thailand: An Estimated Model of Formal vs. Informal Credit
title_full	Access to Capital in Rural Thailand: An Estimated Model of Formal vs. Informal Credit
title_fullStr	Access to Capital in Rural Thailand: An Estimated Model of Formal vs. Informal Credit
title_full_unstemmed	Access to Capital in Rural Thailand: An Estimated Model of Formal vs. Informal Credit
title_sort	access to capital in rural thailand: an estimated model of formal vs. informal credit
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2005/02/5610659/access-capital-rural-thailand-estimated-model-formal-versus-informal-credit http://hdl.handle.net/10986/8918
_version_	1764407131520368640

Access to Capital in Rural Thailand: An Estimated Model of Formal vs. Informal Credit

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